Review of council funding under way

The Scottish executive has launched an independent review of local
government funding as a public finance specialist called into
question the way money is allocated to social services departments.

The executive review, chaired by Sir Peter Burt, will take 18
months and look at all areas of local government finance, including
the grant area expenditure formula which determines how much each
authority gets to fund social services.

A report for Aberdeen Council by public finance specialist Arthur
Midwinter reveals a £135m shortfall in children’s social work
services. He blames this on an erosion of the core grant for
children’s services under the distribution formula, alongside a
rise in demand for services.

On average, Scottish councils are spending 50 per cent more than
the executive budgeted, while 12 authorities are spending 70 per
cent more.

Midwinter said the funding gap was “exceptionally large” compared
with the 2 to 3 per cent gap normally seen in education.

“There is a clear case for the executive to review its funding
provision, or its own objectives for children’s services will not
be met,” he warned.

But Alan McKeown, policy manager at the Convention of Scottish
Local Authorities, said the grant area expenditure formula allowed
councils to take money from other funding streams to meet
priorities.